Posted
by
samzenpuson Wednesday May 02, 2012 @03:47PM
from the for-real-this-time dept.

redletterdave writes "The IPO on everyone's minds for the past few years — and possibly the biggest one in history — is upon us: Facebook will finally make its Wall Street debut on Friday, May 18, 2012. Sources also say Facebook will begin its IPO roadshow on Monday, May 7, and will eventually list its shares on the Nasdaq (not NYSE) with the ticker symbol 'FB.' Facebook looks to raise anywhere from $5 billion to $10 billion during its roadshow to achieve a $100 billion valuation, which would make it one of the biggest IPOs of all-time."

Exactly the same way: advertising. Shows were sponsored by cigarette or car companies (I seem to remember that Perry Mason was sponsored by Viceroy cigarettes, for example) and had live endorsements by cast or filmed commercials (sometimes both) when shows were broadcast. Advertisements paid all the rent.

They spy on you whether you have an account or not. Unless you actively make the effort to block their servers from loading widgets on every other page you visit. It may not link you to a name but it does link you to an IP address which often links you to a rough location (and it's just a matter of making a deal with your ISP to link the IP to your name). If Facebook ever gets an ad network going off of Facebook they will have a lot of info related to your ip to serve those ads.

Don't forget the sheep posting the details of eachother's lives. You might keep my posts professional enough for my boss and grandma while not disclosing but you just need that one asshole frienemy to tag you taking jello shots off a stripper for that strategy to fail. You can decide not to have an account and be blissfully ignorant of all the posts you're included in but, they are still there.

Most of the pages you visit will have Facebook widgets to carefully track your browsing usage for whatever analytics they might want to try, whether or not you sign up or sign in.

So no, I don't have to tell them anything about my life for them to spy on me (and make some money from it).

Oh but there is something demanding that users continue to use Facebook: The Network Effect [wikipedia.org].

And within Facebook's network effect, Critical mass has long since been surpassed and Metcalfe's Law [wikipedia.org] has grown to such a large proportion that, for current users of Facebook, leaving Facebook is akin to simply switching off the internet altogether.

Whenever Facebook reports user numbers, they report *active* users, which they define as using the site once in the last 30 days. You can argue how "active" someone is if they use it once a month, but they don't count your friends who "haven't checked their facebook page in months".

This gets to be a bit of a grey area tho. Alot of these guys have mobile phones with facebook apps, so even if there is no activity, and no active checking of facebook... the apps still login and check for updates...

I expect that counts as "active", even if no new content is ever actually consumed or created.

Also, I'm curious what percentage don't create any new content regularly (ie dont post) I suspect a large number of people just have their cell phone facebook app passively consume content... and if a circle of friends posts die off, their mobile apps all keep pinging the site for non-existent updates... the entire circle has moved on... but they still all "check in" every 5 minutes according to facebook...

My bet is that, just like in most IPOs, the only people to make money from it will be the institutional investors that get in as preferred (early access before normal trading). They'll then cash out as early trading and the "day trader" mentality causes the price to go spiking up. The folks that buy during that spike will be left holding the (empty) bag. Again, as usual. This seems to always happen on these "big" IPO offers. Google's was the same way. Now - if you buy during the spike, you might still make money if you can steel yourself to hold onto it for awhile. Maybe. If you are lucky. Otherwise, for folks like the average slashdot reader, it is a "don't buy".

Yeah, you wouldn't want to end up like one of those fools that bought Google stock from August 2004 - Dec 2005 and sold it at literally any time that wasn't Oct 2008 - May 2009. Or even worse, one of those morons that bought it in the first month when it was under $150 a share! I bet they feel dumb now for buying stock in a company that's already successful.

The problem is... There's been no dividends. You have to sell the shares to get value out of the stock. It's only worth the paper the certs are printed on while you're holding onto it until you find a bagholder that's willing to pay the price you're selling it for.

The only real way to make money on the IPO would be at the start of the spike and attempt to ride the shareseller price up to almost the peak and sell at that theshold- you don't want to become a bagholder on the thing.

It's not just mentality, it's how the market rules are laid out. The possibility of short selling keeps prices from spiking up regularly (effectively, the short sellers punish overeager buyers). Short-selling a stock is very difficult within its first 30 days, meaning that most otherwise-market-neutral traders end up with a long bias on this stock. Of course the stock jumps up as a result. Now, the "IPO mentality" exacerbates this phenomenon, but the long bias would exist even if we were all emotionless robots (or "rational investors").

So, where did this value come from? I mean, I highly doubt that it's genesising value. It's a free service. The product IS the users. That's marketing. Targeting advertising is what facebook's entire revenue stream is hinged on, right?

I know economics isn't a zero-sum game, but facebook isn't generating wealth here. Where did it come from?

Does it produce anything of merit or value past being somethig akin to TV 2.0 for the masses that have Internet?

No?

About like most of the other "social" networking things- I keep wondering how they are making money...because it's not paid for by regular advertising and it's not paid for by Web 1.0 style advertising- and it sure as hell isn't paid for by it's users. "Dot-Bomb 2.0" is what I've been thinking about this.

Facebook is God's gift to marketing data. People willingly give their personal data to have their little ego sites.

Here's the kink: Most of that data is bullshit. And frankly, I love it. Here's an example:

This little old lady I know was told by her kids and friends (myself NOT included - I told her to NOT have a FB account!) to give bullshit data. She really wanted an account, so we insisted that she give enough for those assholes at FB to allow her to open an account. She had to give a cell number - it freaked the poor thing out.

You see, when she FIRST opened one, a neighbor down the street found out all this detail about her that she NEVER published on her FB page. HE then explained what a privacy violation FB is and how one can get all this info on someone with a FB account - GOD BLESS HIM! He SHOWED to her how FB can be and will be used for EVIL.l She saw the light - even though she needed an FB account to communicate with her family (so she says) - she put in bogus data.

Moral of the story, if you're a marketer and you're using FB for data mining pupsoses - AHAHAHAHAHAHAHHAHAHAHAHAHAHAHAHAHAHAHHA!

Marketing people are used to that. You think the girl who fills in the surveys at the supermarket has never "cheated" or decided that it would be easier just to put garbage in the forms herself and go home early? You think market research companies - yes even the big ones - never fudge their reports? Yet despite all that, businesses manage to hold on to marketing departments. So either marketing departments are really good at marketing the need for a marketing department, or maybe there are a few tools available to cut through the crap and figure out which data out of the mountain of data is actually important and relevant, and which isn't.

So either marketing departments are really good at marketing the need for a marketing department, or maybe there are a few tools available to cut through the crap and figure out which data out of the mountain of data is actually important and relevant, and which isn't.

And the answer is: marketing departments are really good at marketing the need for a marketing department

Moral of the story, if you're a marketer and you're using FB for data mining pupsoses - AHAHAHAHAHAHAHHAHAHAHAHAHAHAHAHAHAHAHHA!

I think the more valuable data they get is:1) Who you're "friends" are (both real people and show/band/product pages).2) What links you click on.3) What links your friends click on.4) The overlap of 2 and 3.

This will open low, shoot high, then nosedive and stay low for a long time.You can play in this sandbox, as long as you understand that all the sand belongs to someone else, and at bets you can get in, fill your bucket, dump it, and get back out before any one notices you are there.

Everybody recognizes this for what it is, a cashout for the major FB players.

There are very few companies like Facebook whom have no documented source of their income. They are under legal obligation to provide investors with mission & earning statements. So they will have to answer the question of, if your users are not your customers, are they your product for your real customers?

There are very few companies like Facebook whom have no documented source of their income. They are under legal obligation to provide investors with mission & earning statements.

I've read a lot of them.

You will find precious little detail in the revenue side of a 10K. You get exactly what they want you to get, while sales data is masked and obfuscated and aggregated to the point that you can't tell anything from the Balance sheet. Entire massive R&D projects can be hidden on the costs side of the ledger, such that companies like Apple can spring an entire new concept in in smart phones after three years of development with no one having any clear idea of the cost involved, or even that the project was underway from reading financial statements and annual reports.

Seriously, if you think Sarbanes–Oxley or GAAP rules or SEC regulations provide any clarity or a level playing field you are delusional.

You have it wrong. They have to document a semi-detailed, lets say, one page income statement listing classes of income, and it gets stamped with the approval of a corrupt auditing agency (recall recent scandals where it was all faked).

Trust me, Wisconsin Energy does not give me a copy of individual bills in each quarterly statement. You get lines like "$1B revenue from electric"

I'm casually interested in seeing what they think I need to know. But I certainly don't expect to find anything in there that will give me a great deal of new insight. With some foreign stock holdings, its about the only information you can really find.

Then you're going to be pissed off that several of my reports are now email delivered. No snail mail, or less, anyway.

Examples:

Wisconsin energy is a paper only company. I believe email delivery is optional for quarterlies, but they like to snail mail a big ole paperback book once a year for annual.

I believe PRPFX (a mutual fund) is a email only company. I might have gotten an annual in the snail mail, but I haven't seen a quarterly from those guys in.. forever I guess.

Definitely SLV and GLD (ETFs) are email only companies. I haven't seen paper from those guys since silver was $7 and gold was $500 (which incidentally is pretty close to my DCA share price)

I believe this is a situation where they're legally required to snail mail upon request to a stockholder, so if you really wanted you could send them snail mail and they'd reply with a nice book, in case your wood stove needed kindling. You should make the shareholder services office earn their pay...

I would guess FB will just publish the data to a page and tell people to friend it.

MZ holds over 30% of the company so he is going to have a lot of power. And the IPO is for a thin slice (IIRC 5%) so there not going to be a big shift in who is sitting on the board. And there is no debt - which would be another avenue which could force change.

This is very different then Steve Jobs and Apple or Jerry Yang of Yahoo - who held far less. Even if FB blows up he should be able to hold out for a long time.

No, this will open high, and go even higher, because of exactly the expectation you describe. Then when you and people like you have been stopped out of your short positions, it will nosedive when creative accounting fails to deliver the growth that Wall St. always expects.

judging by that facebook is at best a $20 billion company. about 1/10th the size of google.

yeah, it is a bit more complicated than that, but still facebook is worth nowhere near $100 billion. and really they don't have a whole lot of growth left, they have saturated their market pretty well.

I'd disagree about their growth potential. Certainly their user growth will slow down, but there are plenty of untapped revenue streams - for example mobile ads.

But as for the rest I think you're pretty spot on. I took a quick scan of GOOGs 2011 numbers and they have about the same profit margin and a better debt ratio than Facebook, so it's hard for me to see the justification for having 1/2 the market cap of GOOG with ~1/10th the revenue and 1/10th the net income.

The stock price will sky rocket on the ipo, then drop off a bit a week later (as have others). by this time next year the price will be one third of what people will pay May 18, unless they go the MySpace route and die a slow death.

This IPO will basically put a concrete dollar price on what having the "private data" of 800+ million human beings in your fist is worth. Of course the idiots who run Wall Street will value this "precious resource" at Billions of Dollars. That's the only thing the internet means to them: A way to track people, get at their most private data, to then mine that data to devise new ways of selling goods and services to them. ----------- It isn't Facebook that's being valued here. Its "US". The IPO will put a dollar price on what the private data of X million FB users is worth.-------- Someday Facebook will face a serious downturn just like AOL and Yahoo!, and maybe disappear from the internet landscape altogether. That day can't come soon enough considering that the only thing FB trades in is other people's privacy.

In the real estate biz FB means "f*cked buyer" like a guy who bought at a multigenerational top of a housing bubble, or a guy trying to do landlording from another coast, or a guy stuck paying two mortgages because the old house won't sell, guy who bought without contingencies/no inspection and got screwed, guy who believed the lying commissioned real estate agent when she said there were multiple offers so he should raise his bid but there were no offers (she tried that on me and my wife, I laughed at her) etc. Basically a loanowner who didn't get the house he was expecting. Makes all the comments "FB this" and "FB that" sound much funnier.

I had that experience, where a house was listed at X, but was told that really it was X+delta close to X itself, because there was bidding war in progress. We walked away right then, and the realtor trying it on us then tried to backpedal, whereupon I told her "You're playing games with us, and because of that, I won't buy this house at ANY price, because I will assume any offer I make that you or your client find acceptable will screw me." It's a form of bait-and-switch and I won't play that game... but a lot of people "fall in love" with a house and have to have it. I guess I've had too many houses in my life to really get that attached to them.

I had that experience too. As a seller. Except we had multiple offers, and sold some 15k above asking, 35k above the first offer that came in.

We had a potential buyer walk away as well when they were told a bidding war was in progress...

The last car I bought also took nearly a month to close a deal as I and the owner offered and countered via his salesman at a consignment dealership. During that time, the car sat on the lot, and anyone who came to see it was told that although the car wasn't sold there was already an offer on it.

And backpedalling isn't necessarily because it is a lie, but because just because there is a deal in the works -- it could well fall apart, and you don't want to lose a prospective buyer.

If I'm looking at a house in a bidding war, and I put in a sub-asking price, my only real shot of getting the place is if everyone else fails to close. It -can- and does happen -- sometimes its subject to financing and it doesn't go through, or subject to a 3rd party (e.g. an out of the country spouse has to see it an like it before its finalized, and they fly in a week later and decide they don't want it...) but its not all that likely...

Point being, its not always a lie, and its really hard to know when it is or not. My advice... get a buying agent to deal for you. They can cut through some of that crap, and if nothing else, they can keep an eye on the property.

For what its worth, our selling agents tried hard to bring lots of people in at once... open house tours, etc to maximize the odds of multiple offers... that's his job as a selling agent. He earned his commission.

Ah thats boring.Wait until it gets exciting, like plumbing leaks, or roof needs replacement.For extra fun, imagine court case involving the rental property. Or insurance claim (storm damage, etc).Another good entertainment is local code enforcement.Finally I'll assume that as a/.er you're pretty respectable, but some renters... are not. you can really work a guy across the country...

Now there are property management companies that will take care of these kind of problems... for a fee, often rather high. Your $1600 check is nice, but until you factor in the costs of ownership, prop tax, maintenance can't be deferred forever especially if its rental property, repairs, mortgage if any...

Your Facebook ID becomes the way you pay for everything online and offline. Long-term, one of Facebook CEO Mark Zuckerberg's goals seems to be for your Facebook ID to be your ID everywhere. Given smartphone adoption, you can imagine this happening online and off. If that were to happen, the easiest way for Facebook to make money would be to facilitate offline and online transactions. Potential: PayPal, part of eBay, has an enterprise value close to $20 billion or so. Visa has a market cap of $100 billion.

Venture capitalists fund startups that leverage Facebook data to disrupt their incumbents. Former Facebook executive Chamath Palihapitiya left the company to start a venture capital firm with a single mission: fund companies that will use Facebook's open APIs to take over large, calcified industries like banking, education, and healthcare. Palihapitiya is funding a banking startup, for example, that will give potential customers a credit score based on their Facebook activity. Potential: Unknown. The idea is that Facebook will profit from companies using its data to disrupt incumbants the way it figured out how to profit from Facebook gamesmaker Zynga's disruption of the videogame industry.

Your Facebook ID becomes the way you pay for everything online and offline

Of course. Taxation is one of the best and oldest business models EVER. Just one problem. I didn't vote for FaceBook and various mobile providers to tax me. Not only do I see no benefit in requiring people to have privacy-stealing mobile plans to pay for things, I see it for what it is: taxation without representation.

What are you blathering about? Did you vote for Visa to tax you at ~3%? No, but you likely use them.

If Facebook (or PayPal) offer a competitive service (i.e. facilitating financial transactions in a secure manner) there will be plenty of people willing to pay for it. I could easily see them creating a plug-in that would allow an e-commerce site to let you log in with your FB ID and purchase using your FB credits (or billing it through to a CC you set up on your FB account). I'm not saying I would use it, but I bet a couple hundred million would.

That information is heavily restricted, and there is no good source. However, from personal experience, there is going to be a huger dispersion in numbers so averages are going to do you any good.

You can go to the red hearing now, put it won’t tell you how many shares they are planning on selling or at what price. We will know that on the day of the sale.

Most of the shares will be sold to institutions. If they are public they report their holdings once a quarter. It won’t tell you if they bought it from the underwriter or in the secondary market, but you can guess.

However, some will go to individual investors, and nobody reports on them due to privacy issues.

Since the absolute number of shares sold is public, with the average i could deduce the number of buyers. My bet was, that most stocks will go to institutional buyers and therefor there won't be too many (my bet: 1 million shareholders).

My opponent in the wager postulates, that FB will distribite the shares as far as possible to make their users shareholders as well. He betted on more than 10 million shareholders.

The NASDAQ OMX equities exchanges currently participate in the National Market System Symbology Plan for the selection and use of 1-5 character root symbols, as governed by ISRA, the Intermarket Symbols Reservation Authority.

NASDAQ, NYSE, and other exchanges like to reserve 1 and 2 letter ticker symbols in order to attract big companies to list on their exchange.

Anyone can open a brokerage account. The problem is that you have to have a brain and/or some education to actually make any good use of it.

(seriously, I opened an account with NOTHING. later, the guy who called to check in asked if all was OK, and it came up that he recommended I put $50 to $200 "within about 4 months" to prevent them from auto-closing it as an inactive/unused account. that's hardly a burden.)

Struggling to find where the grandparent mentioned race. Now, some stereotypes were mentioned that are typically associated with a race, but anyone that jumps from those stereotypes and immediately thinks of a race is a racist.

the deliberate use of racial stereotypes implicitly invokes race, and no, pointing someone out as a racist does not make the person pointing it out racist because "only a racist would see all those anti-black stereotypes and know that the AC was insulting black people"

Yeah, I looked for it too, didn't see it. I can't remember which comedian said it, but it's not a race thing. Fried chicken is delicious. If you don't like fried chicken, there's something wrong with you.

Dave Chapelle has a bit where he "discovers" the fried chicken stereotype. "Oh man... all this time I thought I liked it because it was delicious. No they tell me it's because I'm black. Good to know." (Paraphrasing of course.)

Can't wait to see the look on your face. Not because I disagree with you, but because the market is not as rational as you think. EVERYONE expects it to flop, which is exactly why it's going to skyrocket. There is a vast amount of money to be made even out of horse manure. So all the short sellers are in for a ride. All the little day traders who buy it for $X and sell it for $X + $0.05 are in for a ride. The only ones who are going to make money on this are the people who always make money - the ones who currently have money, can buy it at the open, can buy it all the way down the dip, and who can ride out the little ups and downs to sell it next year or so for a killing - just when you're convinced you should start buying it before you miss the boat.

I am, but that's just to see the latest pictures of my GORGEOUS granddaughter, turning 2 this June. The kids post her pics like mad. I keep a minimal profile, under 50 'friends', mostly family or family allies.

That's ok. They'll still have their Like buttons outside of Facebook, and their shareholders, and their corporate partnerships, and their incessant mentions by high-profile users on TV news and shows...